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Appointing Construction Consultants – Recurring Problems

Appointing Construction Consultants – Recurring Problems

Scope of services, standard of care and correct contracting parties. Three standard appointment issues for professional consultants advising on construction projects, but issues which reach the courts on a regular basis as a recent court judgment demonstrates.

A site in Cheshire was being developed for housing. It was a difficult site. It sloped markedly. A retaining wall was built. It was defective. Extensive remedial works were required, including expensive piling. An adjudication against the subcontractor that built the wall was successful, but it was a hollow victory as they were insolvent. Five years later, the contractor started litigation against the engineer. A judge has decided that the engineer is not liable, but there are still lessons to learn from the dispute as the issues were classic ones.

1. The correct contracting parties -was the engineer engaged in his personal capacity or was it his company?

The engineer had decided it would look “more professional” if he did not refer to his company in emails or invoices. Not a good decision. The judge held he had entered into the contract, not his company. This is a problem easily solved. Ensure that the contract (whether created by emails or more formally), and any subsequent invoices, clearly say who the contracting party is.

2. The scope of services -was the engineer engaged to advise on the retaining wall design or not?

The engineer’s involvement at the outset in the design of the retaining wall was unclear and was disputed. The judge decided that although he was closely involved in the process, he was not the designer of the wall. The retaining wall was in the course of being built when the problems arose. The water flowing behind the wall was greater than anticipated and it was only at this stage that the engineer was formally engaged in “a bit of a rushed job” as the contractor was “desperate” for a solution. But what precisely was the engineer engaged to do?

The contractor said the engineer was engaged to provide a solution to the problem so as to provide a design ensuring the wall would be fit for purpose. The engineer disagreed. He said he was not engaged to provide a solution to the retaining wall problems let alone warrant that the wall would be fit for purpose; he said he was only engaged to design a drain that would sit behind the wall and address the problems with the water (a much narrower scope).

The judge examined the emails exchanged when the engineer was appointed. What had been agreed? He decided that it was clear that the contactor had engaged the engineer to design a new high-level drain which was to be installed behind the retaining wall - and that was all.

3. The standard of care -had the engineer agreed that the retaining wall would be fit for purpose or not?

Fitness for purpose or reasonable skill and care? Every professional appreciates the significance of the distinction, not least because their professional indemnity insurance is unlikely to cover the higher standard of fitness for purpose.

It was accepted that the engineer was obliged to exercise the level of reasonable care and skill to be expected of a competent civil engineer in providing the design of the drain. The design of the drain was not flawed and so the engineer was not liable.

However, the judge went on to say that even if he had found the engineer responsible for the design of the retaining wall, he would not have been prepared to imply an obligation that the engineer had warranted that the wall would be fit for its purpose. All very reassuring for consultants, but there is a final point to be made. As an aside, the judge observed that if he had been prepared to find that the engineer had been engaged to amend the design of the retaining wall, he would have been prepared to accept that the engineer was warranting that the wall would be fit for purpose “because if there had been such an engagement it would in context have been one to remedy the problems with the retaining wall and not just to exercise care and skill in further design work”. This is an observation which highlights the importance of the distinction between fitness for purpose and reasonable skill and care obligations – a boundary which is becoming blurred. Any consultant undertaking a similar engagement should ensure that the appropriate standard of care is expressly agreed.